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DCEDNewsroomWolf Administration Issues Emergency Action Plan for the City of Chester

Wolf Administration Issues Emergency Action Plan for the City of Chester

April 26, 2020

Harrisburg, PA – Today, Department of Community and Economic Development (DCED) Secretary Dennis Davin announced that he has issued an emergency action plan for the City of Chester. Earlier this month, Gov. Tom Wolf issued a declaration of fiscal emergency for the city, which required DCED to develop and release this plan within 10 days.

“The COVID-19 pandemic and subsequent collapse in economic activity have exacerbated the city’s pre-existing distressed condition. Anticipated revenue shortfalls and delayed General Fund receipts have put enormous pressure on the city’s operating cash position,” said Sec. Davin. “Under the leadership of Mayor Kirkland, the implementation of this plan will help position Chester to regain its financial footing during this unprecedented and challenging time.”

The emergency action plan was developed in consultation with the city’s Act 47 Coordinator, Econsult Solutions, Inc. Under the plan, the city must implement a hiring freeze and overtime restrictions, eliminate benefits for employees who have been terminated or temporarily laid off where legally permissible, freeze discretionary spending, restrict the incurrence of new debt, review its assets, and implement disciplined financial monitoring and reporting.

Declaring a fiscal emergency is an accelerated version of the Municipalities Financial Recovery Act (known as Act 47) process, and the goal is to ensure that Chester can maintain its operations now and regain financial footing after successful mitigation of the COVID-19 pandemic.

The City of Chester entered the Act 47 program in 1995. The city adopted its original recovery plan in 1996 and adopted recovery plan amendments in 2006, 2013, and 2016. The city’s legacy costs, which consist of debt, pension, and other post-employment benefits, continue to place enormous pressure on the city’s finances, including both the month-to-month cash flow and long-term liabilities. The COVID-19 pandemic has further hindered efforts to strengthen the economy and has placed the city in financial peril.